Correlation Between Pointsbet Holdings and Peninsula Energy

Can any of the company-specific risk be diversified away by investing in both Pointsbet Holdings and Peninsula Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Pointsbet Holdings and Peninsula Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pointsbet Holdings and Peninsula Energy, you can compare the effects of market volatilities on Pointsbet Holdings and Peninsula Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Pointsbet Holdings with a short position of Peninsula Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pointsbet Holdings and Peninsula Energy.

Diversification Opportunities for Pointsbet Holdings and Peninsula Energy

-0.89

Correlation Coefficient

Pointsbet Holdings  Peninsula Energy

Pay attention - limited upside

The 3 months correlation between Pointsbet and Peninsula is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding Pointsbet Holdings and Peninsula Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peninsula Energy and Pointsbet Holdings is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Pointsbet Holdings are associated (or correlated) with Peninsula Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peninsula Energy has no effect on the direction of Pointsbet Holdings i.e., Pointsbet Holdings and Peninsula Energy go up and down completely randomly.

Pair Corralation between Pointsbet Holdings and Peninsula Energy

Assuming the 90 days trading horizon Pointsbet Holdings is expected to generate 0.68 times more return on investment than Peninsula Energy. However, Pointsbet Holdings is 1.47 times less risky than Peninsula Energy. It trades about 0.2 of its potential returns per unit of risk. Peninsula Energy is currently generating about -0.07 per unit of risk. If you would invest  65.00  in Pointsbet Holdings on September 16, 2024 and sell it today you would earn a total of  31.00  from holding Pointsbet Holdings or generate 47.69% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Pointsbet Holdings  vs.  Peninsula Energy

Pointsbet Holdings

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Pointsbet Holdings are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, Pointsbet Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Peninsula Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Peninsula Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Pointsbet Holdings and Peninsula Energy

The main advantage of trading using opposite Pointsbet Holdings and Peninsula Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pointsbet Holdings position performs unexpectedly, Peninsula Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Peninsula Energy will offset losses from the drop in Peninsula Energy's long position.

The idea behind Pointsbet Holdings and Peninsula Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.